Friday, January 12, 2007
Ski Area Sale Produces Winter Heat
Steamboat Pilot newspaper article 12/24/06
Steamboat Springs — Some of Steamboat’s most active Realtors and developers said the announcement that the Steamboat Ski and Resort Corp. is under contract to Intrawest for $265 million will simply further enhance a burgeoning market.
“It will put petrol onto a large and already hot fire,” Michael Hurley said. “It was already burning. It’s just going to go quicker, faster and hotter.”
Fortress Investment Group is funding the ski area purchase to add Steamboat to the portfolio of Intrawest, which Fortress bought in October. The sale of the ski area is expected to close by the end of March.
Hurley has overseen multiple phases of the Trappeur’s Crossing condominium project at Village Drive and Medicine Springs Drive, less than half a mile from the Steamboat gondola.
Hurley is selling condominiums at an average of $800,000 each even as construction at Emerald Lodge continues. Of the 32 condos, seven are available. Just last week, he filed an application with the city of Steamboat Springs to build 32 more units in the sixth and final phase of the project.
His comments about the hot market aside, Hurley is convinced that sales of real estate in the Steamboat market would have continued at a brisk pace absent the ski area’s announcement.
“Personally, I think the fundamentals of the real estate market are such that regardless of Intrawest coming here, the market was already positive, he said. “We would have seen great growth over the next 13 months, just based on supply and demand.”
Jim Cook of Colorado Group Realty concurred that real estate activity in Steamboat Springs and the Yampa Valley shapes its own course independent of ski area ownership. But the announced deal will help, he said.
“You can’t say this isn’t great news for the base area,” Cook said. “American Skiing Co. has a lot of good people here, but they had no money to spend. This is going to be encouragement for projects already on the board.”
Cook is actively involved in several major redevelopment projects in downtown Steamboat Springs.
“It isn’t skiing that is bringing people here to buy homes,” Cook said. “We live in a beautiful place. That’s what will drive it. The ski area is an amenity.”
Pam Vanatta of Prudential Steamboat Realty disagreed.
“I think it validates how important the ski area is,” she said. “We’ve all known what a great ski mountain this is. With Intrawest’s reputation, now, the whole world is going to know it. I think it’s only going to bring a whole lot more people here who will feel the same way.”
Ken Gold of ReMax Steamboat believes Intrawest’s track record of designing and building the best terrain parks in the business at Copper Mountain, Whistler, B.C., and Mammoth Mountain Ski Area in California, could boost tourism and interest in second homes here. If teenagers in a family influence the choice of vacation destinations, the quality of terrain parks rule and any Intrawest upgrades to Steamboat’s parks would be a benefit, he said.
Vanatta and Cook are closer in their view on how Intrawest can update the experience on Mount Werner.
“Everyone’s excited because there’s an expectation they’ll be bringing it up to 2007,” Vanatta said.
Cook said uncertainty about the financial condition of the current ownership is a remark that “rolls off the tongues of a lot of buyers.” A change to Intrawest ownership would defray that caution, he added.
Longtime Steamboat Realtor Steve Downs of Steamboat Village Brokers saw an instant response to news of the sale after forwarding newspaper
accounts to associates and clients in other states.
“I sent the stories from the Steamboat Today and Denver Post to 150 people in my address book,” Downs said. “Within three hours, I had 20 responses.”
Downs believes Intrawest’s reputation will elevate the prestige of Steamboat.
“Our resort will be brought into a higher status, and Intrawest will bring in a higher level of product. You couldn’t have a better (ski area) buyer than Intrawest in terms of their success and track record,” he said.
Downs has been active in real estate here for 32 years and said he just enjoyed his best third and fourth quarters of the year both in terms of numbers of transactions and sales volume.
Vanatta gave a similar report.
“Our company was up 30 percent in dollar volume this year, and this was my personal best year ever,” she said.
Is there a scenario that could see the arrival of Intrawest in Steamboat redefining opportunity in the Steamboat market? Gold believes so. He said he is working with clients who have been looking at property in Breckenridge. They love Steamboat’s laid-back style but are drawn to Breckenridge on another level.
“They like Breckenridge because there’s been so much reinvestment there,” Gold said. With major projects such as One Steamboat Place and Wildhorse Meadows just beginning to come on line, the prospect of reinvestment by Intrawest could help validate real estate prices of $800, $900 and $1,000 per square foot, he said.
“Because of Intrawest’s history with other resort areas, buyers could begin to see a new ground-floor opportunity.”
Gold is in the midst of developing Cimarron at Steamboat Townhomes, within walking distance of the ski slopes. They are still largely under construction, but already there have been re-sales with considerable appreciation realized. Of the 23 units, five are completed and closed at prices above $1 million, and there have been two re-sales in that group including one that was originally sold at $1 million and resold for $1.4 million. Among the 18 remaining units under construction, investors have resold four units at prices of $500 a square foot.
“If we had 20 more Cimarrons to sell, we’d probably bump the prices to $600 and $700 a square foot with the possibility of going to $800 a year further on,” Gold said.
Those kinds of increases in value translate to the entry level of Steamboat’s housing market, Gold said. Less than a mile from Cimarron, Gold is involved in Sunray Meadows condominiums, which represent entry-level product in today’s market. The price of those homes has recently escalated from $200 per square foot to $350 per square foot.
Downs has seen it all in Steamboat in 32 years. He can recall busing tables in restaurants and cleaning condos to augment his income. He urges longtime residents who are anxious about the pace of change in Steamboat to understand that failure to grow means stagnation or regression. Look at the remarkable community assets Steamboat is able to afford and carry on with life in a beautiful valley, he urged.
“The engine that runs every community is business,” Downs said. “We have an incredible medical facility, I was impressed with the community’s willingness to fund a new library. We have a vibrant arts community, look at the benefits (of the half-cent sales tax) for our schools.
“Growth always creates challenge and change. But if you stop change, then there’s a reversal. Would we all like to live in s sleepy little town with fabulous skiing? Probably. Life goes on.”
Steamboat Springs — Some of Steamboat’s most active Realtors and developers said the announcement that the Steamboat Ski and Resort Corp. is under contract to Intrawest for $265 million will simply further enhance a burgeoning market.
“It will put petrol onto a large and already hot fire,” Michael Hurley said. “It was already burning. It’s just going to go quicker, faster and hotter.”
Fortress Investment Group is funding the ski area purchase to add Steamboat to the portfolio of Intrawest, which Fortress bought in October. The sale of the ski area is expected to close by the end of March.
Hurley has overseen multiple phases of the Trappeur’s Crossing condominium project at Village Drive and Medicine Springs Drive, less than half a mile from the Steamboat gondola.
Hurley is selling condominiums at an average of $800,000 each even as construction at Emerald Lodge continues. Of the 32 condos, seven are available. Just last week, he filed an application with the city of Steamboat Springs to build 32 more units in the sixth and final phase of the project.
His comments about the hot market aside, Hurley is convinced that sales of real estate in the Steamboat market would have continued at a brisk pace absent the ski area’s announcement.
“Personally, I think the fundamentals of the real estate market are such that regardless of Intrawest coming here, the market was already positive, he said. “We would have seen great growth over the next 13 months, just based on supply and demand.”
Jim Cook of Colorado Group Realty concurred that real estate activity in Steamboat Springs and the Yampa Valley shapes its own course independent of ski area ownership. But the announced deal will help, he said.
“You can’t say this isn’t great news for the base area,” Cook said. “American Skiing Co. has a lot of good people here, but they had no money to spend. This is going to be encouragement for projects already on the board.”
Cook is actively involved in several major redevelopment projects in downtown Steamboat Springs.
“It isn’t skiing that is bringing people here to buy homes,” Cook said. “We live in a beautiful place. That’s what will drive it. The ski area is an amenity.”
Pam Vanatta of Prudential Steamboat Realty disagreed.
“I think it validates how important the ski area is,” she said. “We’ve all known what a great ski mountain this is. With Intrawest’s reputation, now, the whole world is going to know it. I think it’s only going to bring a whole lot more people here who will feel the same way.”
Ken Gold of ReMax Steamboat believes Intrawest’s track record of designing and building the best terrain parks in the business at Copper Mountain, Whistler, B.C., and Mammoth Mountain Ski Area in California, could boost tourism and interest in second homes here. If teenagers in a family influence the choice of vacation destinations, the quality of terrain parks rule and any Intrawest upgrades to Steamboat’s parks would be a benefit, he said.
Vanatta and Cook are closer in their view on how Intrawest can update the experience on Mount Werner.
“Everyone’s excited because there’s an expectation they’ll be bringing it up to 2007,” Vanatta said.
Cook said uncertainty about the financial condition of the current ownership is a remark that “rolls off the tongues of a lot of buyers.” A change to Intrawest ownership would defray that caution, he added.
Longtime Steamboat Realtor Steve Downs of Steamboat Village Brokers saw an instant response to news of the sale after forwarding newspaper
accounts to associates and clients in other states.
“I sent the stories from the Steamboat Today and Denver Post to 150 people in my address book,” Downs said. “Within three hours, I had 20 responses.”
Downs believes Intrawest’s reputation will elevate the prestige of Steamboat.
“Our resort will be brought into a higher status, and Intrawest will bring in a higher level of product. You couldn’t have a better (ski area) buyer than Intrawest in terms of their success and track record,” he said.
Downs has been active in real estate here for 32 years and said he just enjoyed his best third and fourth quarters of the year both in terms of numbers of transactions and sales volume.
Vanatta gave a similar report.
“Our company was up 30 percent in dollar volume this year, and this was my personal best year ever,” she said.
Is there a scenario that could see the arrival of Intrawest in Steamboat redefining opportunity in the Steamboat market? Gold believes so. He said he is working with clients who have been looking at property in Breckenridge. They love Steamboat’s laid-back style but are drawn to Breckenridge on another level.
“They like Breckenridge because there’s been so much reinvestment there,” Gold said. With major projects such as One Steamboat Place and Wildhorse Meadows just beginning to come on line, the prospect of reinvestment by Intrawest could help validate real estate prices of $800, $900 and $1,000 per square foot, he said.
“Because of Intrawest’s history with other resort areas, buyers could begin to see a new ground-floor opportunity.”
Gold is in the midst of developing Cimarron at Steamboat Townhomes, within walking distance of the ski slopes. They are still largely under construction, but already there have been re-sales with considerable appreciation realized. Of the 23 units, five are completed and closed at prices above $1 million, and there have been two re-sales in that group including one that was originally sold at $1 million and resold for $1.4 million. Among the 18 remaining units under construction, investors have resold four units at prices of $500 a square foot.
“If we had 20 more Cimarrons to sell, we’d probably bump the prices to $600 and $700 a square foot with the possibility of going to $800 a year further on,” Gold said.
Those kinds of increases in value translate to the entry level of Steamboat’s housing market, Gold said. Less than a mile from Cimarron, Gold is involved in Sunray Meadows condominiums, which represent entry-level product in today’s market. The price of those homes has recently escalated from $200 per square foot to $350 per square foot.
Downs has seen it all in Steamboat in 32 years. He can recall busing tables in restaurants and cleaning condos to augment his income. He urges longtime residents who are anxious about the pace of change in Steamboat to understand that failure to grow means stagnation or regression. Look at the remarkable community assets Steamboat is able to afford and carry on with life in a beautiful valley, he urged.
“The engine that runs every community is business,” Downs said. “We have an incredible medical facility, I was impressed with the community’s willingness to fund a new library. We have a vibrant arts community, look at the benefits (of the half-cent sales tax) for our schools.
“Growth always creates challenge and change. But if you stop change, then there’s a reversal. Would we all like to live in s sleepy little town with fabulous skiing? Probably. Life goes on.”
$265M: Sale price gets attention in ski industry
Steamboat Pilot newspaper article by Tom Ross 12/20/06
Steamboat Springs — When American Skiing Co. announced Tuesday morning that it will sell the Steamboat Ski Area to Intrawest, it was the price tag that grabbed everyone’s attention.
$265 million.
That’s a 185 percent increase over the $92.5 million that an investment group led by Tim and Diane Mueller contracted to pay for the ski area just five years ago. American Skiing Co. pulled out of that deal on closing day; a repeat of that scenario seems unlikely this time.
“Creating value is what it has always been about,” American Skiing Co. CEO B.J. Fair said. “We were able to create tremendous value. But it’s also the absolute right thing to do for Steamboat. In addition to the price, (Intrawest) did a good job of articulating what the future of Steamboat can be.”
Intrawest’s announced purchase of the Steamboat Ski Area came just a couple of months after it was acquired by Fortress Investment Group. Fortress, based in New York, is a private equity firm and hedge fund that manages assets totaling $26 billion. Fortress bought Intrawest, which is involved in 10 ski resorts in North America, for $2.8 billion in October.
The Steamboat deal already has made an impression on industry insiders.
“Good for them,” former Intrawest executive David Hill said about what American Skiing Co. will get out of the deal.
Hill is the former senior vice president of resort development for Intrawest and the current president of Resort Ventures West. His company is undertaking the Wildhorse Meadows hotel and residential development in Steamboat.
Hill admitted to being a little surprised by the price.
“How is it that (Steamboat) could go from the price Tim and Diane Mueller contracted to pay for it to where it is today?” he asked.
Grand deal
The sale, expected to close by the end of March, would include the commercial spaces in the Steamboat Grand Resort Hotel, employee housing units at Walton Pond Apartments (owned with other partners), four parking structures and lots with development potential, and Steamboat Central Reservations. The Steamboat Grand has the potential for the addition of a south wing, which might add 70 new units, resort officials said. The deal also calls for Intrawest to assume $4 million in debt.
A major difference between the Triple Peaks and Intrawest deals for Steamboat Ski Area is that the former did not involve the Steamboat Grand. Fair said the Grand has matured into a solid revenue generator in the intervening five years.
Welcoming Intrawest
Six years after leaving Intrawest, Hill is leading the development company building the Wildhorse Meadows project in Steamboat.
Hill, whose development will be tied closely to Steamboat’s Gondola Square via a people-mover gondola, said he would welcome Intrawest’s arrival as a positive development.
“The credibility in Intrawest and Fortress — in the business sense — is extremely positive for us,” Hill said.
Hill confirmed Fair’s stance that the performance of management in both Steamboat and American Skiing Co. headquarters in Park City, Utah, increased the value of the ski area.
“B.J. (Fair) is right that their management team has done a lot to improve their business,” Hill said.
He’s also intrigued with the high value being placed on ski resorts today. “That’s where the market is. We’re seeing that the capital markets have had a heavy focus on the ski industry. Why is that? Is it that it’s in vogue?”
Hill said Intrawest’s sale in December 2005 of a majority share of Mammoth Mountain Ski Area in California for $365 million seems to have set a new benchmark for the acquisition of ski resorts.
Different era
Fair said it’s important to understand the different economic climate in which this sale is taking place. First, he said, the substantive part of the previous sale process in late 2001 took place in the post-Sept. 11 era, when capital markets tightened severely.
American Skiing Co. was in much more difficult financial straits at the time, Fair said, and it was widely known among prospective buyers that the company was in a situation of having to sell a major asset. Those factors combined to put downward pressure on the price in 2001-02.
Despite the fact that its quarterly earnings reports still suffer from the long-standing debt the company carries, American Skiing Co. has been able to steadily improve the financial performance of its resorts.
“The sale is confirmation of that,” Fair said. “Every year, we’ve hit what we said we were going to do.”
In July, he said American Skiing Co.’s board of directors was fully prepared to turn away from the sale process if it didn’t appear a Steamboat sale would realize its goals.
Lasting value
After their deal for Steamboat fell apart, the Muellers purchased Crested Butte Mountain Resort in March 2004. They studied the latest Steamboat sale offering during the fall but did not take their renewed interest to a serious level after the price range became evident.
Tim Mueller would not divulge the amount of the Crested Butte sale, but he said Tuesday that the price he paid for the resort near Gunnison 33 months ago wasn’t comparable to this week’s Steamboat sale. That’s even when you adjust for Crested Butte’s skier visits (about one-third of Steamboat’s in 2004).
“It certainly wasn’t the same magnitude,” Mueller said. “And we got a lot of developable real estate in our (Crested Butte) deal.”
Mueller said the valuation of ski areas has tended to be cyclical, but if the price Intrawest has agreed to pay for Steamboat proves out over time, it will be a positive development for other ski area owners.
“We’ll see if it has lasting value,” he said. “I’d certainly like to think it’s sustainable. If not, it adds a question mark.”
Hill said he expects Intrawest’s leadership to continue to build on its reputation for being able to introduce new management standards without trampling on local sensibilities.
“I feel positive they will continue that,” he said. “They have an ability to inject enthusiasm in the form of capital. That has been a consistent there no matter what ski area they acquire.”
Steamboat Springs — When American Skiing Co. announced Tuesday morning that it will sell the Steamboat Ski Area to Intrawest, it was the price tag that grabbed everyone’s attention.
$265 million.
That’s a 185 percent increase over the $92.5 million that an investment group led by Tim and Diane Mueller contracted to pay for the ski area just five years ago. American Skiing Co. pulled out of that deal on closing day; a repeat of that scenario seems unlikely this time.
“Creating value is what it has always been about,” American Skiing Co. CEO B.J. Fair said. “We were able to create tremendous value. But it’s also the absolute right thing to do for Steamboat. In addition to the price, (Intrawest) did a good job of articulating what the future of Steamboat can be.”
Intrawest’s announced purchase of the Steamboat Ski Area came just a couple of months after it was acquired by Fortress Investment Group. Fortress, based in New York, is a private equity firm and hedge fund that manages assets totaling $26 billion. Fortress bought Intrawest, which is involved in 10 ski resorts in North America, for $2.8 billion in October.
The Steamboat deal already has made an impression on industry insiders.
“Good for them,” former Intrawest executive David Hill said about what American Skiing Co. will get out of the deal.
Hill is the former senior vice president of resort development for Intrawest and the current president of Resort Ventures West. His company is undertaking the Wildhorse Meadows hotel and residential development in Steamboat.
Hill admitted to being a little surprised by the price.
“How is it that (Steamboat) could go from the price Tim and Diane Mueller contracted to pay for it to where it is today?” he asked.
Grand deal
The sale, expected to close by the end of March, would include the commercial spaces in the Steamboat Grand Resort Hotel, employee housing units at Walton Pond Apartments (owned with other partners), four parking structures and lots with development potential, and Steamboat Central Reservations. The Steamboat Grand has the potential for the addition of a south wing, which might add 70 new units, resort officials said. The deal also calls for Intrawest to assume $4 million in debt.
A major difference between the Triple Peaks and Intrawest deals for Steamboat Ski Area is that the former did not involve the Steamboat Grand. Fair said the Grand has matured into a solid revenue generator in the intervening five years.
Welcoming Intrawest
Six years after leaving Intrawest, Hill is leading the development company building the Wildhorse Meadows project in Steamboat.
Hill, whose development will be tied closely to Steamboat’s Gondola Square via a people-mover gondola, said he would welcome Intrawest’s arrival as a positive development.
“The credibility in Intrawest and Fortress — in the business sense — is extremely positive for us,” Hill said.
Hill confirmed Fair’s stance that the performance of management in both Steamboat and American Skiing Co. headquarters in Park City, Utah, increased the value of the ski area.
“B.J. (Fair) is right that their management team has done a lot to improve their business,” Hill said.
He’s also intrigued with the high value being placed on ski resorts today. “That’s where the market is. We’re seeing that the capital markets have had a heavy focus on the ski industry. Why is that? Is it that it’s in vogue?”
Hill said Intrawest’s sale in December 2005 of a majority share of Mammoth Mountain Ski Area in California for $365 million seems to have set a new benchmark for the acquisition of ski resorts.
Different era
Fair said it’s important to understand the different economic climate in which this sale is taking place. First, he said, the substantive part of the previous sale process in late 2001 took place in the post-Sept. 11 era, when capital markets tightened severely.
American Skiing Co. was in much more difficult financial straits at the time, Fair said, and it was widely known among prospective buyers that the company was in a situation of having to sell a major asset. Those factors combined to put downward pressure on the price in 2001-02.
Despite the fact that its quarterly earnings reports still suffer from the long-standing debt the company carries, American Skiing Co. has been able to steadily improve the financial performance of its resorts.
“The sale is confirmation of that,” Fair said. “Every year, we’ve hit what we said we were going to do.”
In July, he said American Skiing Co.’s board of directors was fully prepared to turn away from the sale process if it didn’t appear a Steamboat sale would realize its goals.
Lasting value
After their deal for Steamboat fell apart, the Muellers purchased Crested Butte Mountain Resort in March 2004. They studied the latest Steamboat sale offering during the fall but did not take their renewed interest to a serious level after the price range became evident.
Tim Mueller would not divulge the amount of the Crested Butte sale, but he said Tuesday that the price he paid for the resort near Gunnison 33 months ago wasn’t comparable to this week’s Steamboat sale. That’s even when you adjust for Crested Butte’s skier visits (about one-third of Steamboat’s in 2004).
“It certainly wasn’t the same magnitude,” Mueller said. “And we got a lot of developable real estate in our (Crested Butte) deal.”
Mueller said the valuation of ski areas has tended to be cyclical, but if the price Intrawest has agreed to pay for Steamboat proves out over time, it will be a positive development for other ski area owners.
“We’ll see if it has lasting value,” he said. “I’d certainly like to think it’s sustainable. If not, it adds a question mark.”
Hill said he expects Intrawest’s leadership to continue to build on its reputation for being able to introduce new management standards without trampling on local sensibilities.
“I feel positive they will continue that,” he said. “They have an ability to inject enthusiasm in the form of capital. That has been a consistent there no matter what ski area they acquire.”
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